Planning Real Estate

Time for the lighter side of the real estate business!

One morning a newlywed couple was scoouting for a new home. They cannot believe their eyes when they read an ad fo a mansion being sold for only $1000. And it’s even located in the best part of the town.

When the couple confirmed that this was no typo nor misprint, they decided to see the place.

The facade had a fountain costing at least $30,000. The property was over 5000sq ft, and it is really a very beautiful mansion. In fact it was the most magnificent house in the block. But no matter how impressed they are, they still had second thoughts in buying the property, as they thought it was probably a hoax.

Finally the owner, an old lady, told them her little secret.

The house was completely paid for, but the previous week she got a call from her husband who told her he was leaving her for his secretary. The husband said that the lady could have everything they owned, as long as he could have the proceeds off the sale of the house.

And so the old lady agreed. But asked if she could sell the house while hubby was vacationing in the Carribean with his new girlfriend.

What a good deal that was, huh?

(image source : community-media.com)

The main rule that you have to follow in buying real estate in a declining market is to never buy in a negative cash flow. Investing in a real estate must not be about throwing away your hard earned cash. I suggest that you consult a financial advisor for this.
If you really want to earn money from a property, it will be very hard for you especially with negative cash flow. You can possibly make money out of it, but you will need to research and analyze before you can gain something from that. Watching Home and Living programs or reading books related to is no big help at all. You have to really study on the consequences of negative cash flow on the first stage of ownership period.

If you are planning on buying your own home, follow these helpful tips:

Consider your personality and lifestyle: do you like lively parties or peace and quiet? Would you rather live in the city or in the countryside? These factors determine what kind of home and neighborhood fits you.

Plan your household budget. Are you financially stable? Can you pay for the mortgage?

Research on up-to-date home prices in the neighborhoods that you plan to visit. Is this within your budget? Is the pricing reasonable?

Ask around. Does anyone in your family or group of friends know an expert who can help you in buying your house? Do you know lawyers or inspectors?

Did you know that homework is the king of declining markets? Doing your homework will somewhat expose your property not as cash cow but as a cash vacuum. You have to know that buying is far different from signing an offer. If you are really diligent and dedicated with this, the homework can really provide you all the means in order to make a good deal. You also have to check the local market and validate it carefully. Having enough knowledge on the price stability also helps as the prices are not really consistent or the inventory is at its record levels. You must really consider these situations.

We have two kinds of real estate auctions: bank foreclosures and house auctions. Both are really different each other, yet neither of them is easy to work in.

Majority of the people think that real estate actions are just for bank owned foreclosures. Well that is not really the case all the time. We witnessed a number of owner occupied properties that became successful with house auctions. The best people to use this process are those have hard to sell houses which its properties are unique that don’t really have much appeal or lacks value for some people. Now you know

With the current situation in a declining market, one must be careful in buying real estate as it is a really tricky business. You must be aware and extra careful with your actions. I know a lot of people who purchase a property on a negative cash flow then they don’t concentrate on doing their homework yet they are expecting to have “a beautiful and bright” future. I don’t want you to be included in the list of these dreamers. Be an alert and intelligent investor because you are using your own money. If you do as I instructed, you will surely go a long way compared to the rest.

TRIVIA: Did you know that the current fall in US housing prices in places like Arizona, California, Florida and Nevada are caused by the prices that went up really high? The bubble of inflated prices really distorted the picture on the ground. Houses that in 2002 sold for 60,000 were selling for 300,000 in 2006. Another alarming fact is that these people got their mortages by simply signing their names! Such practice was made due to the false demand since even the old ones who are not supposed to purchase a house ended up buying one in a hurry.

Your personal financial matters are very sensitive issues. It just means that you need to hire a counselor that you have a high level of trust in them. They must be reliable since they are the ones in charge in helping you with planning. The high net worth people usually builds a team approach that is composed of their financial advisor, their accountant and an estate planning attorney. Every professionals in the team are usually capable and educated and have handled a number of clients that trusts them and through reputation. It is important nowadays that a team has divisions so they can accomplish their jobs well.

If you’ve already decided on important details like your beneficiaries, it is about time that you hire a professional estate planner. You have to decide if you want to get a traditional estate planner, who specializes on the complicated numbers and physical assets or would you rather hire a holistic counselor who also incorporates legacy planning and development into the works. Individuals who are rather conscious would rather invest with the best, bank with the best and group with the best team. Take note that you have to consider a lot of factors before you hire an estate planner.

It is important that you go through legacy and estate planning. It gives the clients the privilege to tell their finances, legacy and values plan progress. The significance of correct estate planning is not really that important for majority of the entrepreneurs and professionals. The term “estate” usually points out that you’ve worked hard to collect. It includes your real estate, home, stocks, bank accounts, mutual funds, cars, bonds, life insurance, jewelry, artworks and business interests. If you have a concrete plan, there is tendency that you will have to pay a high tax bill. It can be as high as 50-55%. Not only that, there is a tendency that your beloved beneficiaries will suffer from the inconvenience with all of the requirements they have to work on.